tag:blogger.com,1999:blog-2761684730989137546.post3918577117924169490..comments2024-03-28T07:50:06.102-04:00Comments on Mike Norman Economics: Banks And Money (Sigh) — Brian Romanchukmike normanhttp://www.blogger.com/profile/03296006882513340747noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-2761684730989137546.post-47715438972301576622019-11-25T07:56:03.233-05:002019-11-25T07:56:03.233-05:00“money" is an ambiguous term that should be b...“money" is an ambiguous term that should be banned from economics, as Brian notes. "Money" is one of those weasel words that everyone thinks they understand; yet, no one does owing to the extremely high level of abstraction that makes it a wild card. ”<br /><br />You’re mixing (synthesizing) methodologies again...<br /><br />Liberal Art trained deals with the literal using figurative ... “money” is figurative it’s NOT a “wild card!”... it’s a figure of speech ... you can’t correct a reification error in interpretation of the figurative using more figurative language... someone not understanding “money!” isn’t going to helped by you telling them it’s a “wild card!”... <br /><br />MMT the other day saying “the budget is not a pizza!”... no shit Sherlock...<br /><br />Science trained deals with the real thru abstractions... unit of account, assets, liabilities, debits, credits, income, loss, balance sheet, cash basis, Accrual basis, etc.. all abstractions... <br /><br />It’s one or the other... take your pick... <br />Matt Frankohttps://www.blogger.com/profile/11978352335097260145noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-85224234551144070252019-11-25T06:18:34.052-05:002019-11-25T06:18:34.052-05:00Andre both Tom and Brian are Monetarist thru synth...Andre both Tom and Brian are Monetarist thru synthesis of the MMT theory with the Monetarist theory via their Platonistic methodology they use... if you synthesize you always end up retaining some of the other theory.... doesn’t work...Matt Frankohttps://www.blogger.com/profile/11978352335097260145noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-3949356883502496212019-11-24T15:30:38.113-05:002019-11-24T15:30:38.113-05:00Andre,
Given increased confidence (or irrational...Andre, <br /><br />Given increased confidence (or irrational exuberance as Greenspan called it) commercial banks will create and lend out more money. E.g. given rising house prices, houses become better collateral, thus banks will assist the boom by lending more. That assumes they are not constrained by reserve or capital requirements, of course. <br /><br />Conclusion: bank money can certainly be a driver of asset values, though I'm not sure about "primary driver". Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-31754487958050408052019-11-24T14:47:20.155-05:002019-11-24T14:47:20.155-05:00"bank money is a primary driver of asset valu..."bank money is a primary driver of asset values and goods prices."<br /><br />I couldn't understand that.<br /><br />If you are talking about financial assets, the main drivers of their prices are the base interest rate and the risks of the underlying claims (market, credit, liquidity, operational, reputational or whatever risk).<br /><br />If you are talking about real assets, like property, plants, equipment, inventory or whatever, there is a complex price dynamic driven mainly by the usual consumer demand, producer supply, risks involved, inflation and so on.<br /><br />In either case, "bank money" don't seen to be a driver or directly affect prices...Andréhttps://www.blogger.com/profile/10935332922520483975noreply@blogger.com